THE value of Australian farmland has grown by an average of 6 per cent annually over the past 20 years, making it one of the best-returning and most resilient long-term asset classes available to investors, The Australian reports.

Three years ago, in collaboration with a group of farmers and investors, my spouse and I formed an LLC called Living Lands. Together we wrote our purpose and articles of incorporation to place the highest priority on soil health.

After the poor performance of funds in 2008, and subsequent failure of many other alternative investments, it's understandable that investors would be wary.

American Farmland Investments's insight:

An investment in farmland meets the criteria mentioned in this article. It allows an investor to diversify because it does not correlate to other asset classes. It produces an annual cash disbursement and has lower risks and higher returns.

“The farm - best home of the family, main source of national wealth, foundation of civilized society, the natural providence.” Today, more than a hundred years later, this quote still captures the essence of American agriculture and its importance...

Over the years, there has been an increasing demand for agricultural properties especially among the British people who are drawn to the lush sceneries of a farmland and the appeal of the laid back life of the rural.

Three of Australia's biggest agribusiness investors believe a wave of new capital – both offshore and domestic – is poised to flood into the sector as global demand grows for wheat, beef, lamb and other Australian commodities.

"There's a wall of interest in investing in Australian farmland," said Elizabeth O'Leary who heads up Macquarie Group's agriculture funds that include sheep and cattle giant Paraway Pastoral and cropping aggregation enterprise Lawson Grains.

"For the last seven years, Australia has missed out on the significant land appreciation that has occurred in places like Canada and the US due to various trade and climatic conditions."

As a result, she said Australian farms look "relatively well priced at the moment" and were made more attractive by the lower currency.

"Australia is seen as a stable, more reliable and more predictable jurisdiction to establish and do business in and with a government and banking sector that operates in a very transparent way. It's also a very predictable jurisdiction to do an exit from too.

"Lot of investors today are looking to explore opportunities for core plus and even invest in more opportunistic projects or develop something that was not there before. The investor universe is changing," she said.

She added that aggregation was key to productivity – "small 1000 to 2000 acre farms really struggle" – and that there were opportunities for investors on "different sections of the risk spectrum".

Mr Corbett said Hassad had chosen Australia for its first investments outside of Qatar and was embarking on it second round of investments into the country.

"[Australia is favoured] because of its strong rule of law, strong systems in place around foreign ownership and because it had the infrastructure to move produce from farm to port."

Looking at other jurisdictions through a similar lens, very quickly narrows down the options, he said.

"You know you will get a 4 to 5 per cent yield and 4 to 5 per cent capital growth per year in Australia. Those returns are quite reasonable and realistic. That's very important for others investors coming in. You don't want to oversell, otherwise, you create opportunities to fail," he said.

PROXIMITY TO ASIA

Mr Setter said Consolidated had bought into Australia because of its proximity to Asia and the opportunities to develop existing assets and procure more assets.

"There is a new era for demand that's coming from meat processors, butchers and fast food groups. They who want to renegotiate. It's very exciting. We are in a whole new price area," he said.

He said there were further opportunities in the Ord region of Northern Australia – where Consolidated Pastoral owns a big "whack of land" – but which required infrastructure investment by both the government and the private sector.

"This will happen over time. It won't be easy but it will be customer pulled. What's needed is a Northern Australia paper and agriculture paper so decisions are aligned," he said.

Eliminating hunger across the globe isn’t just the right thing to do, it’s the smart thing to do to protect American economic and security interests.

American Farmland Investments's insight:

This is another reason an investment in farmland is a pretty safe bet. Farmland is shrinking and the demand for food will continue to increase. When supply decreases and demand increases at the same time....the product (farmland) increases.

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